News

Austria extends TOMS
VAT

Austria is to extend the application of its Tour Operator Margin Scheme (TOMS) to apply to VAT
registered customers from 1 January 2016.

TOMS is a regime permitted by the European Union VAT Directive to simplify the VAT compliance
burden of travel tour operators. Where operators are buying holiday products across the region, they are exempted from the obligation to VAT register in each country to resell the products as holiday
packages to their customers. Instead, they are paying the full VAT on sales of packages, and deducting the input VAT suffered on the purchases of hotels, transport and other services, the tour
operator pays a simple VAT amount based on their profit margin.

The current Austrian version of TOMS only permits the use of the scheme for sales of packages to
consumers (B2C). Under the new Tax Law Act 2015, Austrian operators may apply the scheme where they are also selling to other VAT registered entrepreneurs (B2B).

Italy ditches 2% VAT hike

Italy has dropped its commitment to raise VAT from 22% to 24% in 2016.

The rise was included in the country’s 2014 emergency stability package, and based on the country
not hitting Euro currency deficit reduction targets. The VAT hike clause also included a potential further rise to 26.5% by 2018. The measure was proposed under pressure from the European
Commission which had threatened sanctions against the country if it failed to stay within the 3% deficit to GDP Euro currency requirement.

Italy raised its VAT rate from 21% to 22% in October 2013 in the midst of the Euro currency
crisis.

Norway

The 2016 budget was presented to the parliament on 7 October 2015 with the intention to promote employment, growth and structural
adjustment in the Norwegian economy; it will come into effect as of 1 January 2016. Norway’s 8% VAT rate will rise to 10% and will relate to transport services and products related to entertainment.
In order to boost investment and employment the Government will cut its corporate tax from 27% to 25% with a second stage seeing the rate drop to 22% in 2018.

EU drops standard VAT return proposal

The European Commission (EC) has announced that it is to drop plans to introduce a standard EU VAT return for the 28 member
states.

The concept of a harmonized EU VAT return was proposed by the EC in October 2013 to help companies burdened by having to understand
differing information and computation methodologies across the EU. It proposed to have just five single boxes to complete, with an additional 31 supplementary boxes, divided further by different VAT
rates. Returns would be standardized to a monthly basis only. The new regime was to be introduced by 2017.

At present, the information requirements vary enormously between the member states: there are only four input boxes for Ireland; but 586
for Italy.

The EC has now announced in its 2016 Work Programme that the plan has gained little support at the EC Council, including excessive
requests for compromises. It has therefore decided to drop the proposal to enable progress on other VAT simplification proposals.

Expert article - HQ Europe # 67 - September 2015

BC&A - PCMA Webinar

BC&A is hosting a PCMA webinar on VAT in the European Union.

The webinar will take place on Wednesday September 10 at 1:00pm
Central.